JD.com spin-out launches $500m China VC fund
GenBridge Capital, a venture capital firm whose founders include two members of Chinese online retailer JD.com’s M&A team, is seeking to raise $500 million for its debut China fund.
The filing for GenBridge Capital Fund I does not indicate how far the firm's fundraising efforts have progressed, but AVCJ understands that the original target was $400 million with a hard cap of $500 million. Singapore's GIC Private is the anchor LP, with JD.com also committing a sizeable amount. Other early investors are said to include several family offices.
The executives identified in the filing are Bin Chang, Xinzhao Zhang, Hui Li and Sidney Huang. The first three are the firm's founding partners, while Huang is currently CFO of JD.com.
Chang and Zhang were both previously members of JD.com's investment and strategy department. Before that, they worked at Capital Today Group and China International Capital Corporation, respectively. Li was formerly an investment professional at TPG Capital.
Formerly known as 360buy or Jindong.com, JD.com received more than $1.7 billion in venture capital and private equity funding in the three years ahead of its $1.78 billion IPO in May 2014. Capital Today was one of the earliest investors. Having established itself in the ranks of China's largest internet companies, JD.com has sought to diversify its business through various strategic investments.
The company's portfolio includes the likes of online package tour operator Tuniu, payments service Fenqile, food-ordering platform Ele.me, auto listings platform Bitauto, and delivery services provider Dada Nexus. In the past year, JD.com has also backed Yintai Capital, Bitauto's auto financing platform, and merged its online-to-offline (O2O) business unit with Dada Nexus to form New Dada.
GenBridge is likely to have a similar consumer and technology, media and telecom (TMT) focus, albeit concentrating on earlier growth-stage rounds.
The team is not alone in spinning out from one of China's internet giants. Richard Peng, head of M&A at Tencent Holdings, left the company in 2015 and launched Genesis Capital, while several former Baidu executives created Xianghe Capital. Going back even further, Andrew Teoh worked in corporate development for Alibaba Group before departing in 2011 to form Ameba Capital. Last year the firm closed its second renminbi-denominated fund at RMB1 billion ($157 million).
These firms' ability to raise capital is largely dependent on the networks and investment expertise accumulated by the founders in their previous roles. Ongoing ties to the internet giants vary in terms of formality from loose agreements to collaborate on deal-sourcing to direct economic interests, as appears to be the case with GenBridge.
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